Free Financial Risk Management Questions and Answers

Question 1

What else is referred to as a net worth statement

Accepted Answer

Balance Sheet

Answer

Statement of Owner's Equity

Answer

Income Statement

Answer

None of the above

Question 2

The possibility that a transaction won't properly clear is referred to as the

Accepted Answer

settlement risk

Answer

credit risk

Answer

exchange risk

Answer

clearance risk

Question 3

What does RR mean?

Accepted Answer

EAD recovered

Answer

FAD recovered

Answer

PD recovered

Answer

LGD recovered

Question 4

Which risk comes from the failure of the settlement?

Accepted Answer

Operational risk

Answer

Performance risk

Answer

Market risk

Answer

Credit risk

Question 5

It is possible that several borrowers in one country default on their loans is

Accepted Answer

sovereign risk

Answer

currency risk

Answer

credit risk

Answer

interest rate risk

Question 6

If the market needed return is 14% and the bond yield is 7%, what is the market risk premium?

Accepted Answer

0.07

Answer

0.005

Answer

0.21

Answer

0.02

Question 7

Which of the following does not affect interest rates?

Accepted Answer

None of the above

Answer

Increase in credit demand

Answer

Rising inflation

Answer

Growth economy